Max Ventures and Industries to amalgamate with subsidiary Max Estates

Max Ventures and Industries Ltd on Tuesday said its board has approved amalgamation of the company with its wholly-owned subsidiary Max Estates Ltd as a part of group's restructuring exercise and to focus completely on real estate business.

In November, Max Ventures and Industries had announced an exit from specialty packaging film business. The company sold its entire 51 per cent stake to Japanese joint venture partner Toppan Printing for Rs 600-650 crore as part of the company's decision to fully focus on real estate segment. Its board had then authorised the Investment and Finance Committee to explore various modalities for restructuring with Max Estates Ltd and be renamed as Max Estates after receiving the required statutory approvals.

According to a regulatory filing, the company informed that the board of directors, in its meeting held on April 18, has approved the "composite scheme of amalgamation and arrangement amongst Max Ventures and Industries Ltd and Max Estates Ltd and their respective shareholders and creditors."

The scheme is for amalgamation of Max Ventures and Industries Ltd (MVIL or transferor company) with Max Estates Ltd (MEL or transferee company).

In consideration of the amalgamation, MEL or the transferee company will issue its equity shares to the equity shareholders of the MVIL or transferor company. For every one equity share held in MVIL, the shareholders will be issued one share credited and fully paid-up in MEL.

After the scheme comes into effect, the transferor company will be automatically dissolved without being wound up. Further, the shares held by the transferor company in the transferee company will get extinguished and cancelled.

"Management deliberated that the scheme is a part of an overall re-organisation plan to rationalise and streamline the existing group structure," the filing said.

The amalgamation would lead to simplification of the existing holding structure and reduction of shareholding tiers to remove impediments, if any, in facilitating future expansion plans and create enhanced shareholder value.

The consolidation of businesses will create greater operational synergies and efficiencies at multiple levels of business operations and will provide significant impetus to their growth.

"The amalgamation would result in financial resources being efficiently pooled, leadlng to centralised and more efficient management of funds, greater economies of scale and a bigger and stronger resource base for future growth which are presentiy divided amongst two separate corporate entities within the group," it said.

MVIL and MEL operate businesses that complement each other and therefore, can be combined for mutual benefit of the shareholders.

In November, Sahil Vachani, MD and CEO of Max Ventures and Industries, had said, "The decision to divest the residual 51 per cent stake in specialty packaging business to the existing partner is to generate additional growth capital to deploy in the real estate business that offers tremendous growth opportunities."

With the divestment, the company had said it would be able to create a war chest of more than Rs 1,000 crore for expansion in the residential and commercial real estate portfolio in Delhi-NCR.

The company's first 'Grade-A' office building 'Max Towers' in Noida, comprising around 6-7 lakh square feet, has been almost fully leased. It has developed second office building 'Max House' at Okhla in the national capital with around 2 lakh square feet of leasable area.

The company is now developing a new office complex 'Max Square', comprising 7 lakh square feet of leasable area, on Noida Expressway. This is being developed through a joint venture with New York Life Insurance Company, which has a 49 per cent stake in the project.